There are many investors who are still trying to understand how the stock market could rise and reach record peaks even when there was a raging trade war going on between the United States and China, the Brexit uncertainty and in the face of possible political uncertainty in the US with the impeachment proceedings of president Donald Trump.
One of the possible explanations is that this is a new trend in the stock markets which continue to reach new heights followed by more new highs irrespective of the geopolitical situation around it.
The S&P has reached 19 new record highs – and set to reach more new all-time highs in 2019 alone on the back of 18 new all time highs for the index in 2018, 62 in 2017, 18 in 2016, 10 in 2015, 53 in 2014, and 45 in 2013. 2013 was the first year after the global financial crisis of 2008 that the S&O had reached new heights for the first time since 2007 just before the onset of the financial crisis.
However analysts say that investors always need to worry about one issue of another while investing in the stock market. This is applicable when everything seems to going well both politically and economically as of now when the markets are at an all time high.
But there are two major issues that investors face while working in a market in all-time high situations. First, any new all time highs in the stock market have the tendency to further cause strong performance in the markets. And human instinct naturally attracts investors towards rising markets. However ultimately, one of those new all time highs will be the ultimate one that will hold in the market for some time. And such clusters of all time highs will inevitably be followed by periods of lows as was seen in the 1970s and 2000s when the stock markets almost did not reach new highs since they were struggling with nasty bear markets.
However analysts also say that investors should not be weary of all-time highs at the stock market. For investors planning to stay for a long time on the stock market will have pt put up with the all time highs because stocks mostly go up over time and hence indices reaching all time highs is completely normal.
However since about 5 per cent working days at the stock market historically are always all time highs, therefore there will be quite a lot of them over the long time. Ultimately one of the highs would the ultimate high with a downfall following it. However the high number of highs in the market makes it almost impossible to predict with any degree of certainty which one that will be the ultimate high.
(Source:www.fortune.com)
One of the possible explanations is that this is a new trend in the stock markets which continue to reach new heights followed by more new highs irrespective of the geopolitical situation around it.
The S&P has reached 19 new record highs – and set to reach more new all-time highs in 2019 alone on the back of 18 new all time highs for the index in 2018, 62 in 2017, 18 in 2016, 10 in 2015, 53 in 2014, and 45 in 2013. 2013 was the first year after the global financial crisis of 2008 that the S&O had reached new heights for the first time since 2007 just before the onset of the financial crisis.
However analysts say that investors always need to worry about one issue of another while investing in the stock market. This is applicable when everything seems to going well both politically and economically as of now when the markets are at an all time high.
But there are two major issues that investors face while working in a market in all-time high situations. First, any new all time highs in the stock market have the tendency to further cause strong performance in the markets. And human instinct naturally attracts investors towards rising markets. However ultimately, one of those new all time highs will be the ultimate one that will hold in the market for some time. And such clusters of all time highs will inevitably be followed by periods of lows as was seen in the 1970s and 2000s when the stock markets almost did not reach new highs since they were struggling with nasty bear markets.
However analysts also say that investors should not be weary of all-time highs at the stock market. For investors planning to stay for a long time on the stock market will have pt put up with the all time highs because stocks mostly go up over time and hence indices reaching all time highs is completely normal.
However since about 5 per cent working days at the stock market historically are always all time highs, therefore there will be quite a lot of them over the long time. Ultimately one of the highs would the ultimate high with a downfall following it. However the high number of highs in the market makes it almost impossible to predict with any degree of certainty which one that will be the ultimate high.
(Source:www.fortune.com)
